Top Economist says spending on FOBTs is “destroying jobs”

Up to 22,000 jobs could be at risk if spending on betting shop roulette machines continues to grow, a report has concluded.

An economic analysis of spending on FOBTs commissioned by the Campaign for Fairer Gambling has concluded that FOBT revenue could grow to £3.4 billion in 10 years and, though this could create 11,400 jobs in the betting shop sector, the cost to employment in the wider local and consumer economy could be as high as 33,700 job losses.

Howard Reed, Director of Landman Economics and a former Chief Economist at the Institute for Public Policy Research, carried out the research to assess the impact of growth in FOBT spending on local economies and across the wider consumer economy. The report estimates that an extra £1 billion of FOBT spend produces a net reduction of 13,000 jobs and with projected doubling of revenue by 2023 over 22,000 jobs could be destroyed.

Howard Reed, added: “The bookmaking industry argues that regulating fixed odds betting terminals will shrink the size of the betting shop sector and cost jobs. But this view ignores the potential for job creation elsewhere in the economy. If consumers aren’t spending their money on FOBTs they’ll be spending it on other goods and services, and FOBTs are exceptionally bad at creating employment compared with most other things that people might spend their money on.”

The report also highlighted that the betting shop sector ranks among one of the lowest paid industries and that an expansion in FOBTs could reduce the total economic output across local communities by £650 million over the next 10 years. Even tax revenue from FOBTs, which are currently part of a Government Review into stakes and prizes, could be insufficient to counter tax losses elsewhere due to the shift in spending. The report estimates a £50 million loss to the Exchequer over the next 10 years.

Hugh Robertson, the responsible Minister at the Department of Culture, Media and Sport was questioned in Parliament recently about FOBTs. The shock findings of the economic report were used by Andy Slaughter MP to question claims by the Association of British Bookmakers that FOBTs make a significant contribution to the economy. He said “The economic impact of betting shops is important, but it needs to be assessed in the context of the total impact on local economies.”

Tom Greatrex MP (Rutherglen), who led the debate, said ““I am not against gambling and think it should be up to people to decide for themselves if they want a bet, but this report makes clear there are largely negative economic consequences from the proliferation of high stakes fixed odds betting terminals.”

“Bookmakers are an important employer in my constituency, but it is wrong for the gambling lobby to scaremonger about the impact of campaigns for fairer gambling. The report supports the calls that better regulation of these machines would not cost jobs and damage local economies.”

Derek Webb, founder of the Campaign for Fairer Gambling, said: “What is increasingly evident is that the impact of roulette machines in betting shops goes beyond the creation of a new generation of problem gamblers and the consequences that will produce, but now there are wider economic consequences for this is shift in expenditure.”

Webb added, “We are looking at a potential doubling of FOBT revenue over the next 10 years, a doubling of the misery being caused by these machines. The Government must act to bring FOBTs in line with all other gaming machines across the UK.”

ENDS

About the Campaign for Fairer Gambling
It is a campaign striving for fairness in gambling. So, the campaign is centred around the three licensing objectives of the Gambling Act 2005, aimed at:
1. preventing gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime,
2. ensuring that gambling is conducted in a fair and open way, and
3. protecting children and other vulnerable persons from being harmed or exploited by gambling.

The Campaign aims to:
1. Engage with politicians to toughen legislation
2. Gather evidence of unfairness and non-transparency
3. Rally support from special interest groups to highlight the negative social and economic impact caused by problem gambling under the current legislation

The Campaign for Fairer Gambling (www.fairergambling.org), a not-for-profit entity funded by Derek Webb and Hannah O’Donnell.

Derek Webb was a successful poker player, businessman and the inventor of Three Card Poker; a game that is played worldwide on casino tables and is an expert in understanding gambling game content and gambler behaviour. Derek and his partner, Hannah O’Donnell, have retired from commercial activity following an asset sale of their gambling games to a US public company. Derek and Hannah provide funding for the Campaign for Fairer Gambling and the Stop the FOBTs Campaign.

Landman Economics is an economic research consultancy which specialises in econometric modelling work and policy analysis. Howard’s jobs prior to founding Landman Economics in 2008 included; Chief Economist at the Institute for Public Policy Research, one of the UK’s leading “think tank” research institutions (2004-08); Programme Director at the highly-regarded Institute for Fiscal Studies, with special responsibility for the IFS’s TAXBEN tax-benefit microsimulation model
(1995-2004).